Technically Speaking Blog

November Soybean Prices Offer a Spring Riddle

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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As of Friday, April 19, 2024, November soybeans closed at $11.61 a bushel and are holding up fairly well, considering the top two U.S. soybean competitors are harvesting somewhere between 7.3 billion and 7.5 billion bushels (DTN ProphetX chart)
SOYBEANS:

As of Friday, April 19, 2024, November soybeans are down 25 1/4 cents in April at $11.61, showing some expected bearish pressure at a time when Brazil is near the end of its soybean harvest and Argentina is just getting started. Depending on your preferred estimates, the two countries are expected to gather somewhere between 7.3 billion and 7.5 billion bushels of soybeans in 2024, a large amount of new supply by any measure. With a load like that on the way, it wouldn't be surprising to see prices making new lows.

On Friday, however, November soybeans closed up 11 3/4 cents, supported by a Thursday afternoon report from the Buenos Aires Grain Exchange which said Argentina's 14% harvest progress was down from the five-year average of 36% for this time of year. Argentina's harvest has been hindered by wet conditions and both southern Brazil and Argentina have forecasts for more rain this week, adding to harvest difficulties. At the same time, the price of July soybeans on China's Dalian exchange is up 9% from its February low, an indication of recent buying interest.

Technically speaking, November soybean prices remain under bearish pressure with resistance at $12.04, the highest close in March and also slightly above the 100-day average. Friday's CFTC data showed noncommercials in soybeans increased net-short positions from 158,477 to 171,893 as of April 16, not far from their largest short position on record. The question of the moment is can we expect the current bearish pressure to lift?

Active selling in the first two months of 2024, ran out at $11.23 in late February and was followed by active buying in early March. Buying interest since March 21 has been less active. Still, so far, the market is not allowing prices to return to the February low, a possible clue that selling interest appears mediocre. A close above $12.04, if it happened, would demonstrate a return of active buying interest in November soybeans when fundamental supply expectations are bearish and specs are heavily net short --- a potentially bullish scenario near the start of the U.S. growing season.

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Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of commodities, futures or options involve substantial risk and are not suitable for everyone.

Todd Hultman can be reached at Todd.Hultman@dtn.com

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Todd Hultman